IRS Dirty Dozen 2014At the beginning of every year, the Internal Revenue Service publishes a list containing the most common scams taxpayers can expect to encounter as the year progresses. The top 12 scams anticipated for 2014 are detailed below.

1. Identity Theft

Topping the list of expected scams for 2014 is identity theft, which involves the use of personal information without the individual’s permission. If you become a victim of identity theft, the thief will use your social security number, name or other sensitive information to commit crimes or fraud. For example, some identity thieves may use your information to file a fraudulent tax return and claim a refund under your name.

2. Phone Scams

The second most pervasive scam expected this year is the phone scam, in which a caller pretends to represent the IRS in order to steal your identity or money. The caller may suggest that you are entitled to a refund or that you owe money to the IRS. He or she may also threaten certain penalties, such as an arrest.

3. Phishing

Phishing occurs when a fake email or illegitimate website attempts to collect sensitive information, such as credit card numbers or social security numbers. With this information, the perpetrator is able to steal your money and/or identity.

4. Inflated Refunds

During tax time, some scammers may promise to prepare your taxes and obtain a significant refund you would never expect to receive. The tax preparer may charge money for inaccurate advice, or he or she may even file a fraudulent return on your behalf.

5. Preparer Fraud

Preparer fraud occurs when someone poses as a licensed tax preparer in order to steal your identity or commit refund fraud. Avoid this scam by using a preparer who can provide a valid IRS Preparer Tax Identification Number.

6. Hiding Money Offshore

Some taxpayers try to avoid their tax obligations by hiding their money in overseas entities, such as brokerage accounts or banks. This scam is expected to continue in 2014.

7. Fake Charities

In 2014, some scammers may try to impersonate charities in order to collect money from taxpayers. This scam is especially common after natural disasters or other tragedies.

8. False Income, Expenses or Exemptions

Another scam expected in 2014 involves maximizing refundable credits by claiming income you never earned, expenses you never paid or exemptions you don’t qualify to receive. Penalties for this scam may include prosecution, interest and penalties.

9. Frivolous Arguments

Some taxpayers use outlandish or unreasonable arguments in order to avoid paying taxes. These arguments have been thrown out of court in the past and may lead to a variety of penalties if attempted.

10. Fraudulent 1099s or False Wage Claims

In order to reduce their tax liability, some taxpayers submit “corrected” 1099s or W2s that contain inaccurate information. These schemes can result in a fine of up to $5,000.

11. Abusive Tax Structures

Abusive tax structures involve the creation of multiple flow-through entities in order to evade the payment of taxes to the IRS. Anyone involved in or encouraging such a scheme faces prosecution.

12. Misuse of trusts

Trusts are a common tool in tax and estate planning. However, some scammers may encourage the improper use of trusts by instructing you to transfer of assets into them with the promise of extremely high deductions and/or the elimination of certain owed taxes. Using trusts improperly is illegal and may result in serious consequences.